Dhaka Drafts Coal Policy to Ensure Energy Security

Dhaka drafts coal policy to ensure energy security

DHAKA, Dec. 13 (Xinhua) — The government of Bangladesh has drafted a policy for coal that focuses on national energy security and introduction of incremental rate of royalty for companies which will be engaged in coal mining.

The policy says that any coal mining company will have to use or sell the same amount of coal in the country that it will export, the New Age reported Tuesday.

If any company exports one ton of coal, it has to use or sell one ton of coal in the country.

The draft suggested that all the power plants of the country will have to be coal-based from 2012-2013.

The companies which will extract coal should be encouraged to set up coal-based power plants, or the government should take initiatives to set up coal-based power plants to ensure the energy security of the country.

About 90 percent of the country’s power plants are gas-based and thus put pressure on the country’s energy security.

The policy proposed introduction of incremental rate of royalty on coal. The current rules allow any company to provide the government a fixed rate of six percent royalty on coal over the years it is engaged in coal mining.

The draft proposed a fixed rate of six percent royalty and variable rates over the years depending on the rise and decrease of coal price on the international market for foreign companies.

The government is preparing the coal policy as the country’s current limited gas reserve of 14 trillion cubic feet of gas will probably be exhausted by 2015.

Bangladesh has a coal reserve of over two billion tons high quality coal, equivalent to 53 trillion cubic feet of gas.